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Cites Achievements For Consumers, Employers, Insurers and Licensees

Superintendent of Insurance Gregory V. Serio today stated that 2001 was a year in which the New York State Insurance Department saw great success by responding to the needs of New York’s consumers, insurance professionals, and businesses who buy insurance.

"2001 was an important year in the insurance industry in many respects. The most prominent influence was the horrible tragedies that occurred on September 11th. No one could have ever imagined the man-made devastation, but I am pleased to report that the Department was prepared along with the industry to meet the immediate challenges that arose from the WTC disaster," said Serio.

Specifically, the industry’s Insurance Emergency Operations Center (IEOC) was activated within one hour of the disaster and within 24 hours senior executives from 15 major insurance companies were seated in a command center in Albany that was also staffed by agency personnel and representatives of the largest homeowner and commercial property underwriters in the Greater New York Metropolitan Area. The team began compiling information from the insurance community across the State that included gathering damage assessments and coordinating response efforts. The IEOC also acted as an information clearinghouse for consumers facilitating conversations between New Yorkers, the Department, and the industry.

Consistent with Governor’s Pataki directive to ease the burdens on those personally affected by the tragic events of September 11, the Department established a dedicated seven-day a week toll-free disaster assistance and information hotline; coordinated insurance industry participation at the Family Assistance Centers and various other public forums for those affected by the disaster, to ensure consumers had access to representatives of the insurance companies; streamlined the payment of claims by consumers in their time of need through an industry standard affidavit that can be used in lieu of a death certificate and established special procedures and dedicated specific staff to respond to consumer complaints and identify and eliminate incidences of fraud.

"Anticipating and responding to the needs of the consumers in New York State remains the Department’s highest priority and in doing so health insurance, fighting insurance fraud and providing additional Department services to New Yorkers were important achievements last year," said Serio.

"Health care is a necessity. As the national leader in providing the most comprehensive and highest level of health care to its citizens, New York State continues to strive to provide all New Yorkers access to quality care at a reasonable cost," said Serio. "The Healthy NY insurance program, enacted under HCRA 2000, was executed throughout the year and began accepting enrollees as of January 1, 2001. Healthy NY gives New York's hard working families the affordable, comprehensive insurance coverage they need."

In May, the Department debuted the State’s Healthy NY Web site, which is available in both English and Spanish. In addition, a recent study on Healthy NY by a professor in the Department of Public Health Policy and Management at the Harvard School of Public Health, issued by the Commonwealth Fund, confirms that the program’s innovative design provides a new approach to reducing health insurance premiums for working uninsured of New York State.

"Not only is the Department committed to ensuring that consumers have appropriate health insurance coverage, the Department, under the State’s External Review Law, ensures that New Yorkers are given the ability to exercise their health insurance rights and gain access to critical care," stated Serio. "This landmark reform has been so successful that more New Yorkers are exercising their rights under this Law than consumers in any of the other 41 states with External Review Laws."

During the program's second year, there were over 1,600 requests for external appeals and since the Law took effect in July 1999, 640 denials of coverage by health insurers have been overturned and an additional 150 denials were overturned in part. Additionally, 105 expedited external appeal decisions have been rendered with 50 overturned completely or in part. An appeal must be expedited if the patient's physician attests that a delay in treatment would pose an imminent threat to the patient's health. Expedited appeal decisions must be made by the agent within three days.

"In addition to comprehensive and affordable health insurance, New Yorkers are entitled to continued affordability and accessibility of automobile insurance. Auto insurance fraud is a crime that costs New York’s drivers $1 billion annually and threatens the long-term stability of New York’s auto marketplace. The Insurance Department continues to do everything within its power and jurisdiction to eliminate fraud from the insurance arena, but we cannot do it alone. Without meaningful reform to the no-fault insurance system, we are fighting this battle one arrest at a time," said Serio.

In May, the Department proposed the most comprehensive overhaul of auto insurance in New York State in almost 30 years to combat fraud and reduce auto insurance premiums. The sweeping legislative and regulatory package includes an Executive Order issued by Governor George E. Pataki naming the Attorney General as Special Prosecutor to coordinate investigatory and prosecutorial efforts at the State level to combat auto insurance fraud. If fully implemented, the package will ensure that all New Yorkers will have access to comprehensive auto insurance protection at an affordable cost.

In December, the Department announced a major reform package for the State’s automobile no-fault insurance arbitration program. The initiative expedites settlement of insurance disputes, reduces abuses to the system by health providers and attorneys, and compels more efficient and effective management of claims by insurance carriers.

"In addition to changing industry regulations the Department continues its war against insurance fraud with a record high of 554 arrests in 2001, a 10% increase from 2000 and a 381% increase since 1994," said Serio. "The Department is fighting insurance fraud from every angle within our power, amending regulations that direct the industry and stepping-up our frauds unit resulting in more arrests than ever in the Department’s history."

The Department also developed a Handbook For Livery Drivers, available in English and Spanish as a vital resource for livery drivers as they navigate the process of securing necessary insurance coverage. The Handbook provides tips to livery drivers regarding what is appropriate coverage and how to ascertain that they are dealing with legitimate brokers or agents.

"Livery drivers provide a crucial service to the people of New York City. We continue to work closely with the insurers to ensure that all drivers continue to have adequate insurance coverage," said Serio.

"Reaching out to more consumers in addition to making it easier for consumers to reach the Department were important initiatives in 2001," said Serio.

Beginning last year consumers were able to file insurance complaints against insurance companies, agents/brokers and other State licensees on the Department’s Web site in a secure, encrypted environment. The on-line complaint form provides improved responsiveness to meet the needs of New York State consumers and this enhanced customer support provides those New Yorkers a quick and easy way to submit complaints if the situation is deemed necessary.

"The Department’s licensing initiatives better protect New York’s consumers and improve the operating environment for agents and brokers in New York State," said Serio.

New on-line technology enabled agents to complete applications for all individual life and accident and health license renewals over the internet. A total of 2028 licenses were renewed over the internet. In addition, the Producer Information Network (PIN), an electronic communication network that links state insurance regulators with the entities they regulate, became fully operational. This network allows all insurers to appoint and terminate licensed agents electronically.

Prior to 1994, there was as much as a 90-day backlog for applications and renewals of licenses. These new capabilities allowed for application and renewal of licenses to be turned over within 24-48 hours and the number of complaints regarding delay in issuing licenses decreased to zero.

"It is clear that the Department was confronted by challenges last year, but we were well prepared. We have persevered as a stronger and more focused Department and I am certain New Yorkers will continue to reap the benefits of the Department’s initiatives," added Serio.

Further information on all of the Department’s initiatives is available on the Insurance Department's Web site at

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